The monetary union between Curaçao and Sint Maarten is being described as a “time bomb ready to explode,” following renewed discussion about a possible breakup of the shared currency arrangement.
In a letter to Curaçao Parliament, the government recently indicated that it is considering exiting the monetary union with Sint Maarten. The development comes after years of political and financial debate involving Caribbean policymakers, the Netherlands, and the Central Bank.
The author of the opinion, a former member of the Council of Ministers of the Netherlands Antilles, states that he had already warned as early as 2006 against entering a monetary union when the islands transitioned to their new constitutional status in 2010.
According to the former official, those warnings were ignored at the time by the De Jongh-Elhage Cabinet and the Central Bank of the Netherlands Antilles. He claims that instead of addressing the concerns, political pressure and intimidation were used to silence opposition.
The core criticism is that the monetary union was established without a solid economic foundation or proper feasibility study. The arrangement, he argues, was largely driven by pressure from the Netherlands, which at the time had concerns about Sint Maarten operating its own central bank.
Experts generally note that successful monetary unions require strong coordination of macroeconomic, financial, and budgetary policies among participating countries. Examples such as the European Union and the Eastern Caribbean Currency Union demonstrate the importance of alignment in fiscal discipline and economic strategy.
However, according to the critique, such coordination has been largely absent between Curaçao and Sint Maarten. Instead, the two countries have followed increasingly divergent economic paths, with recurring signals that Sint Maarten may consider withdrawing from the arrangement.
The concerns are not new. As far back as 2015, a former Minister of Finance reportedly stated in Parliament that the monetary union was “not a priority,” further raising doubts about its long-term viability.
Drawing comparisons to historical cases, the author points to the failed monetary union between the Czech Republic and Slovakia, which collapsed just six weeks after the breakup of Czechoslovakia, as an example of the challenges involved when countries pursue independent economic policies under a shared currency.
While the Curaçao–Sint Maarten monetary union has lasted significantly longer, the author suggests it may ultimately face a similar fate if underlying structural issues are not addressed.
The government has not yet taken a final decision, but the renewed debate signals that the future of the shared monetary system may soon come under closer scrutiny.
Alex David Rosaria (53) is a freelance consultant active in Asia & Pacific. He is a former Member of Parliament, Minister of Economic Affairs, State Secretary of Finance and UN Implementation Officer in Africa and Central America. He’s from Curaçao and has a MBA from the University of Iowa. (USA).